“In November this year, the European Central Bank begins supervising the biggest banks in the European Union. From now on, the main responsibility for detecting risky banking, or banks that are outright failing, rests with that institution. Preparation has been ongoing since the so-called Single Supervisory Mechanism [SSM] was adopted by the Council and the European Parliament in the autumn of 2013. Rules on ethics were part of the considerations leading up to the approval, but it seems the ECB was not concerned with people with close ties to the very megabanks the SSM is supposed to supervise.”
“The European Central Bank gets considerable powers* with the SSM. It can approve, reject, or annul a licence for a bank; it can order restructuring, impose a new leadership, and it can order capitalization in case a bank appears to be too vulnerable. All this to make the European banking sector more resilient. The draft decisions are made by the Supervisory Board and presented to the Governing Council of the ECB for a final decision. But should a bank want to object to the report of the Supervisory Board, it can file a complaint to the Administrative Board of Review, a panel of only five persons.”
“Over the past years, Corporate Europe Observatory has highlighted several cases where the ECB has shown to be very close to big banks. They include the membership of ECB President Mario Draghi of the Group of Thirty – a club for central bankers and some of the biggest banks in the world – that has served as a lobbying vehicle for specific reforms of financial regulation that favoured big banks, including in the years preceding the financial crisis.”**
“The strong presence of big banks in the advisory groups of the ECB has been an additional cause of concern. Also, there are important international experiences that should be taken into account. In the aftermath of the financial crisis in 2008, an investigation into the Federal Reserve in the US was conducted. Though initially confidential, the report has been made public. It testifies to severe 'regulatory capture' inside the Federal Reserve – an experience that should not be repeated on European soil.”
“When preparing for the European Central Bank's new mission as the main supervisor of the biggest banks, it was decided by the Council, the European Parliament, and the ECB that new rules on revolving doors would be appropriate. As a result, the ECB will impose a two year 'cooling off period' that will bar ex-employees from taking up a position with a private bank for two years. This move is most welcome, and will take the ECB ahead of the Commission on ethics rules concerning revolving doors. However, revolving doors go both ways, and the admittance of people from the private financial industry to high posts can lead to other kinds of problems.”
“... in the case of the ECB and its Administrative Board of Review, rules on employing staff from private financial companies are absent. Also, the 'declaration of interest' that the members of the board are to complete upon appointment, seem to be nothing but a solemn promise with a signature.”
“While the ECB meticulously guards its independence from member state government agencies in the decision on 'the establishment of the Administrative Board of Review', strikingly there is no parallel text on independence from private companies.”
* The official declaration of the European hegemony of “bankcracy” with the signature of Mario Draghi, is now a fact. The European Central Bank, ECB, becomes the absolute dominant, through the unlimited purchase of government bonds in eurozone, and the Frankfurt bankers are preparing for their biggest party so far. As expected, the bank-occupied media rushed – once again – to crow. In essence, the decision means that Europe passes into a hastily, coercive federalization, in terms that serve exclusively the destructive neoliberalism. The ECB is converted into an equivalent European Fed, which means, gaining complete control of the money flow through the whole eurozone.